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March 28, 2017

Extremist YouTube videos could cost Google $750m

As YouTube and Google's ad crisis worsens, analysts estimate the company could lose up to $750 million.

By Joe Clark

YouTube could lose up to $750 million in advertising revenue as companies withdraw their support, according to analysts.

This month has seen over 250 companies withdraw advertising from Google’s YouTube service in a boycott regarding adverts appearing next to extremist content. Analysts at Nomura Instinet, estimate that YouTube could stand to lose up to 7.5%, roughly $750 million, of its $10.2 billion gross revenue forecast.

Companies who have joined the boycott so far include AT&T, Verizon, Walmart, General Motors, and Johnson and Johnson, who account for five of the Top 20 US advertisers, and who contribute 7.5% to the US total advertising market.

YouTubeIn a note to clients Nomura Instinet said: “Ad buyers are likely to demand greater direct control over ad placement, which could take time and resources to implement.”

The controversy first came to light in the UK when several brands, including the government, withdrew advertising support over fears of appearing next to extremist content. Since then the movement has snowballed.

Google has apologised and promised changes to the way it’s ads are managed with plans to take a tougher stance on extremism, ensuring that ads appear on content with higher levels of brand safety, a simplified management of exclusions, and newer, more finely tuned controls to allow brands greater control over where their ads appear.

Philipp Schindler, Chief Business Office, Alphabet, said in a blog post: “We’ll be hiring significant numbers of people and developing new tools powered by our latest advancements in AI and machine learning to increase our capacity to review questionable content for advertising.”

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“In cases where advertisers find their ads were served where they shouldn’t have been, we plan to offer a new escalation path to make it easier for them to raise issues. In addition, we’ll soon be able to resolve these cases in less than a few hours.”

These changes come in the wake of severe backlash, which has even seen the company brought before a UK parliamentary committee.

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